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Turkey is holding talks with other centralbanks for swap lines

Timothy Ash from Bluebay Asset Management questions who amongst the G20 would be willing to extend a swap line with Turkey in terms of either having enough ammunition or the willingness.

Turkey is holding talks with other centralbanks for swap lines

Turkey is holding talks with other central banks to agree on currency swap lines, state-run Anadolu Agency reported.
Anadolu, which cited Turkish central bank Governor Murat Uysal for its report on Sunday, gave no further details. The country’s international reserves are running low because of state lenders’ interventions to prop up the lira.

Turkish authorities have reached out to other Group of 20 central banks to be included in arrangements that allow monetary authorities to exchange currencies, people familiar with the efforts said earlier this month.

Declines in commodity prices and domestic demand amid the global coronavirus pandemic are putting downward pressure on inflation, Uysal said.

“Turkey is in the right condition to overcome the epidemic swiftly, with the least possible damage” he said.

Timothy Ash from Bluebay Asset Management questions who amongst the G20 would be willing to extend a swap line with Turkey in terms of either having enough ammunition or the willingness.

“China perhaps, albeit there are still tensions around the Xighur issue – the Fed and G7 central banks would have concerns over monetary policy settings and likely push Turkey to go on an IMF programme. The U.K. has the best current relations therein with Turkey – and currently is benefiting from medical supplies being delivered from Turkey. The EU would I think want reassurances on developments in the eastern Med and migrants. Relations with Saudi are still strained after the Khasoggi affair. Indonesia is friendly but needs its own FX ammo. India has plenty of FX ammo but likely is still annoyed with Ankara for the Khashmir response. SA has limited FX reserves, and needs them itself. Russia has the ammo but would demand concessions from Erdogan in Idlib” said in a note to clients.

Bloomberg

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